A bill has been passed which means the first-past-the-post voting system for local elections will be replaced with the single transferable vote (STV).
The voting system for local elections is to change
The proposal was one of the key measures of the controversial Local Governance Bill.
The bill passed its final stage in the Scottish Parliament by 96 votes to 18 on Wednesday.
It is expected that the new system could be in place for the next council elections in 2007.
The proportional representation (PR) voting system forms part of the coalition deal struck between Labour and the Liberal Democrats.
The STV system would see the creation of larger wards represented by three or four councillors.
Before the bill was passed on Wednesday, opposition parties described it as a "grubby political fix".
And even some Labour backbenchers said they were opposed to the move, arguing that PR would reduce their party's power and break the link between councillors and the electorate.
They have warned that the new system would need to be carefully explained to voters.
But Finance Minister Andy Kerr promised to help people understand the system through leaflets, new systems providing support and advice
at polling stations, education and publicity.
He said: "We have opted for three and four member wards to strike the correct balance between proportionality and the size of the ward and the councillor-ward link.
"The local government and transport committee endorsed that view also and it's the job of committee members to take the evidence, but not always to agree
and to take decisions on their own about the merits of the arguments presented to them."
Scottish Socialist Party leader Tommy Sheridan said the executive's proposal was "the worst of all
worlds", accusing ministers of "ignoring all of the evidence presented to the committee and sticking with party political and grubby compromises".
The Scottish National Party's Patricia Marwick described the move as a "political fix" by the Lib Dems and Labour.
Tory local government spokesman David Mundell said: "It is not about proportional representation, it is about a hybrid voting system not used anywhere else in the world and it's the lowest common denominator which could meet the short term interests of both Labour and Lib Dem MSPs without giving a single concern to local democracy and voters."
But Mr Kerr insisted that "no system is perfect", saying that in various countries STV systems had been adapted to meet local circumstances.
The Convention of Scottish Local Authorities (Cosla) has spoken out against the move.